Liberty's tills ring out hope for retailers

Retail stocks, beaten down in recent weeks amid fears that the festive season has been dismal on the High Street, are getting something of a boost in early morning trading from news that the performance of Liberty in December almost matched the previous year's record.

The AIM-listed department store said trading in November "reflected the general retailing slow down" but added that "sales in December exceeded expectations and almost matched last year's record Christmas."

During the festive season, Liberty was clearing its stocks in preparation for a widely anticipated major renovation this month which will result in two-thirds of its famous mock-Tudor fronted London store being redesigned.

"Trading was also helped by Liberty's newly-launched e-commerce business which exceeded expectations and showed particularly significant growth in December," the company added. Liberty is up 6p at 232.5p.

Liberty's statement is just the first of many: the New Year will bring with it a flurry of sales updates from among the retailers.

Shares in Debenhams, which is due to release its trading update tomorrow, are flat at 25.5p having been slightly lower at the opening. In contrast Next, also reporting on Tuesday, adds 23p to 1132p.

Marks & Spencer adds 11p to 232p on hopes that the retailer will maintain its dividend payout despite expectations that its trading up date on Wednesday will show M&S's biggest decline in sales for a decade.

But the morning's most spectacular performance comes from JJB Sports, whose shares rocketed more that 70% after Friday's news that the heavily indebted sports retailer has brought on board former Next boss Sir David Jones and ex-Selfridges chief executive Peter Williams.

Jones, who is credited with turning around Next and was knighted in the New Year's Honours List, will be executive chairman with Williams head of strategy. Shares in the company - which lost 96% of their value in the three months from September last year - were up 30% on Friday after the news. This morning they have put on another 3.54p - or almost 70% - to 8.8p.

With London's dealing rooms back at full capacity after the festive break, the FTSE 100 starts the week in moderately positive territory, buoyed by hopes that President-elect Barack Obama will get the US economy moving with his planned $310bn worth of tax cuts.

A rise in the crude oil price is helping oil majors push the index of London's leading shares higher ands by mid-morning, the FTSE 100 index is up 22.04 points at 4584.83.

Banking stocks gained ground in early trading after Gordon Brown's comments over the weekend about maintaining access to credit for British businesses. While he said a fresh bailout of the banking sector is not the preferred option, the fact that it is an option at all has given some traders confidence that the government could step in again if the situation worsens.

Barclays is up 0.3p at 157.3p, despite Deutsche Bank cutting its price target for the stock to 250p from 290p. It has also reduced its target for RBS to 60p from 75p. The shares are 51.4p, down 1.1p.

Drug shares are boosted by press reports that Pfizer, perhaps most well-known as the maker of impotence drug Viagra, is looking to acquire one of its larger rivals. GlaxoSmithkline adds 7p to 1273.5p and AstraZeneca gains 10p to 2804p.

WPP adds 8.75p to 419.5p after a report that the advertising group is looking to rein-in costs by axing of several thousand jobs.

Elsewhere in the media sector, Aegis gains 0.75p to 77.5p on hopes that chairman John Napier, who ejected chief executive Robert Lerwill in November, will launch a full-scale strategic review of the business.